Amazon Publishing has secured licenses from Warner Bros. Television Group’s Alloy Entertainment division for its New York Times best-selling book series Gossip Girl, by Cecily von Ziegesar; Pretty Little Liars, by Sara Shepard; and Vampire Diaries, by L.J. Smith; and plans to announce more licenses soon. Through these licenses, Kindle Worlds will allow any writer to publish authorized stories inspired by these popular Worlds and make them available for readers to purchase in the Kindle Store.

Amazon will pay royalties to both the rights holders and the authors whose fanfic is published, with the author’s rate set at 35% of net revenue. Works must be at least 10,000 words in length, although Amazon is piloting an “experimental new program” for work between 5,000 and 10,000 words.

Kindle Worlds will launch fully in June with “over 50 commissioned works from authors such as #1 New York Times best-selling author Barbara Freethy, Bram Stoker Award-winner John Everson and RITA Award-winner Colleen Thompson. At that time, the Kindle Worlds self-service submission platform, where any writer can submit completed work, will also open.”

Content producers have had an uneasy relationship with fanfic over the years, with some taking action to get fanfic removed from the web whilst others quietly pretend that the fanfic doesn’t really exist. A few notables, such as JK Rowling, have been more supportive of fanfic. And, of course, for EL James, Twilight fanfic turned into the 50 Shades of Grey phenomenon, after a quick search-and-replace.

Fanfic is popular not just because your character development and world building has been done for you, but also because it allows you to immerse yourself in a world that you love. But that doesn’t mean that it’s easy to write good fanfic. It takes all the skills that writing original fiction does, plus a comprehensive knowledge of a world and characters that someone else has created but which other fans know just as well as you do. There’s little room for error and if you get something wrong, it will be pointed out.

Kindle Worlds is, though, a paradigm shift in fanfic, not only legitimising its creation but also providing its authors with a fully legal mechanism for realising a financial return on their work. For most fanfic writers, their reward has always been limited to the approval of their peers and the joy they get writing it. Now some will find an opportunity to get a little bit more back for their work.

For content licence owners, Kindle Worlds provides a new revenue stream, a new way to engage with fans and, potentially, a way to reach new readers/viewers. Amazon is promising to create content guidelines that will help writers understand the boundaries within which their work must stay, an undoubtedly necessary move to reassure the franchise owners that Kindle Worlds won’t trash their reputation with a load of rubbish.

The question that the publishing industry has to ask itself, though, is why did they not think of this themselves? Why have publishers not engaged more fully with fanfic writers to provide them with an arena to legally produce works based on someone else’s characters? It’s not like fanfiction is new — its modern incarnation started in the 1960s with Star Trek fiction. Content creators have had half a century to understand fanfic and do something constructive with it, but yet it’s Amazon who are making the move to woo fanfic writers.

How many more business opportunities are Amazon going to create from things that the publishing industry has ignored or rejected? Publishers cannot allow themselves to be pushed constantly onto their back foot by Amazon, they can’t let outdated attitudes towards copyright, licensing and creativity define their future. They need to do what Amazon does only too well: Find under-served communities and then give them the tools to write, to create and to make money from their work.

UPDATE 22/5/13: John Scalzi has posted some preliminary thoughts on his blog about the Kindle Worlds project and what it means for authors. Scalzi's very good at spotting potentially dodgy dealings at the crossroads and says that the Kindle Worlds project raises a few red flags for him. His first red flag is:

“We will also give the World Licensor a license to use your new elements and incorporate them into other works without further compensation to you.”

i.e., that really cool creative idea you put in your story, or that awesome new character you made? If Alloy Entertainment likes it, they can take it and use it for their own purposes without paying you — which is to say they make money off your idea, lots of money, even, and all you get is the knowledge they liked your idea.

A second problem Scalzi noticed is this:

“Amazon Publishing will acquire all rights to your new stories, including global publication rights, for the term of copyright.”

Which is to say, once Amazon has it, they have the right to do anything they want with it, including possibly using it in anthologies or selling it other languages, etc, without paying the author anything else for it, ever. Again, an excellent deal for Amazon; a less than excellent deal for the actual writer.

I strongly recommend that you read Scalzi's post if you're considering the implications of Kindle Worlds for you and your fanfic writing. Keep an eye out for future posts from Scalzi too, he's got eagle eyes when it comes to authors' rights.